Sh. Hari Om Kumar Tayal (HUF), Delhi V. ITO, New Delhi

ITA 3963/DEL/2013

• Counselvise Citation: 396320114 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 24-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Assessee Lawyers: VIRENDRA PRATAP
• Keywords: Application of stay; Reasonable cause; Non compliance
• Section: 142(1); 246; 144

Judgement Text

ITA NO. 3963/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C , NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. N O. 3963/DEL/2013 A.Y. : 2008 - 09 HARI OM KUMAR TAYAL (HUF), F - 105, ASHOK VIHAR, PHASE - I, DELHI 110 052 (PAN: AAAHH2711M) VS. INCOME TAX OFFICER, WARD 19(2), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. VIRENDRA PRATAP, FCA DEPARTMENT BY : SH. ROBIN RAWAL, SR. DR DATE OF HEARING : 22 - 1 - 201 5 DATE OF ORDER : 30 - 1 - 201 5 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - XX II, NEW DELHI DATED 26 . 3 .201 3 P ERTAINING TO ASSESSMENT YEAR 2008 - 09 ON THE FOLLOWING GROUNDS: - 1. THAT THE LD. CIT(A) HAS ERRED BOTH & LAW IN THE FACTS OF THE CASE IN NOT ACCEPTING THE FACTS THAT APPELLANT WAS PREVENTED ITA NO. 3963/ DEL/ 2013 2 BY SUFFICIENT CAUSE AND IN THE QUANTUM APPEAL HE HIMSELF HAS ASKED FOR A REMAND REPORT MAINLY FOR THE REASON THAT NONE OF THE NOTICES WERE SERVED PERSONALLY AND THE APPELLANT WAS NOT IN A POSITION TO APPEAR. 2. IT, THEREFORE, PRAYED THAT THE APPEAL MAY KINDLY BE ACCEPTED. 2. BRIEF FACTS OF THE CASE ARE THAT THE R ETURN D ECLARING INCOME OF RS.1,10,000 / - WAS FILED ON 30.09.2008. THIS WAS PROCESSED U/S 143(1) ON 05.08.2009 AT THE RETURNED AMOUNT. THIS CASE WAS SELECTED FOR SCRUTINY AS PER CASS. STATUTORY NOTICE U/S 143(2) WAS ISSUED AND SERVED. IN RESPONSE, SHRI SAMIR SHARMA, CA/AR OF THE ASSESSEE ATTENDED ON CERTAIN OCCASIONS, FEW DETAILS CALLED FOR HAVE BEEN FILED, BOOKS OF A/CS, WHICH WERE REQUIRED TO BE PRODUCED HAVE NOT BEEN PRODUCED. SUPPORTING DOCUMENTS HAVE ALSO NOT BEEN PRODUCED. A NUMBER OF OPPORTUNITIES HAVE BEEN PROVIDED, HOWEVER, THESE HAVE NOT BEEN AVAILABLE. THIS TIME BARRING ASSESSMENT IS, THEREFO R E, COMPLETE EX PARTE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE AO COMPLETED THE ASSESSMENT U/S. 144 OF THE I.T. ACT AND MADE THE VARIOUS ADDITIONS /D ISALLOWANCES. 2.1 THE AO DURING PENALTY PROCEEDINGS U/S. 271(1)(C) DATED 29.4.2011 HAS OBSERVED AS UNDER: - THIS CASE WAS SELECTED FOR SCRUTINY. TO COMPLETE SCRUTINY ASSESSMENT PROCEEDINGS SEVERAL NOTICES, AS DETAILED BELOW, WERE ISSUED TO THE ASSESSEE: - S.NO. NOTICE ISSUED UNDER SECTION DATE OF NOTICE DATE OF HEARING 1. 143(2) 14.9.2009 22.9.2009 2. 143(2) 24.9.2009 29.9.2009 ITA NO. 3963/ DEL/ 2013 3 3. 142(1) + REQUISITION LETTER 11.1.2010 4.2.2010 4. 142(1) 20.7.2010 3.8.2010 5. 142(1) 30.8.2010 17.9.2010 THERE HAS BEEN NON COMPLIANCE TO THE ABOVE MENTIONED NOTICES BY THE ASSESSEE. VIDE NOTICE DATED 13.10.2010 ISSUED U/S. 274 /271 OF THE I.T. ACT, 1961 FIXING THE HEARING ON 26.10.2010, THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY PENALTY U/S. 271(1)(B) SHALL NOT BE IMPOSED FOR ITS DEFAULT OF FAILURE TO COMPLY WITH THE ABOVE MENTIONED NOTICES. ON 13.10.2010. ON THE HEARING DATE, SH. SAMIR SHARMA, CA, AR ATTENDED, FILED CERTAIN AND FOR FILING REMAINING DETAILS HEARING WAS ADJOURNED TO 10.11.2010. HOWEVER, NO RE PLY/ EXPLANATION TO PENALTY NOTICE U/S. 271(1)(B) WAS FILED ON 26.10.2010. TO AFFORD ANOTHER OPPORTUNITY DURING PENALTY PROCEEDINGS, VIDE THIS OFFICE LETTER NO. ITO/W - 19(2)/2011 - 12/2654 DATED 13.4.2011, THE APPELLANT WAS REQUIRED TO SHOW CAUSE AS TO WHY P ENALTY U/S. 271(1) SHALL NOT BE LEVIED. IN RESPONSE THE ASSESSEE THROUGH ITS COUNSEL HAS FILED LETTER DATED 25.4.2011 REQUESTING TO DROP PENALTY PROCEEDINGS STATING AS UNDER: - THAT THERE WERE HUGE ADDITIONS WERE MADE. THAT AGAINST THE ADDITION APPEAL HAS ALREADY BEEN FILED WITH THE CIT(A) - XXII, NEW DELHI AND SAME IS STILL PENDING. ITA NO. 3963/ DEL/ 2013 4 IN VIEW TO PROVISO SECTION 275 THE PENALTY PROCEEDINGS MAY BE STAYED TILL THE DECISION OF APPEAL. THAT WE ARE VERY MUCH HOPE FULL THE APPEAL WILL BE IN OUR FAVOUR. NOW WE REQUEST YOUR GOODSELF TO KINDLY ALLOW STAY OF DEMAND TILL THE DISPOSAL OF APPEAL AND DROP THE PROCEEDINGS AND OBLIGE. 2.2 THEREAFTER PENALTY PROCEEDINGS VIDE O RDER U/S. 271(1)(B) R.W.S. 274 OF THE I.T. ACT, 1961 WAS INITIATED UPON THE ASSESSEE BY THE ASSESSING OFFICER VIDE HIS ORDER DATED 29.4.2011 BY HOLDING AS UNDER: - PENALTY PROCEEDINGS U/S. 274(2/71 OF THE I.T. ACT WERE INITIATED VIDE NOTICE DATED 13.10.2010 FIXING THE HEARING ON 26.10.2010 ASKING THE ASSE SSEE TO SHOW CAUSE AS TO WHY PENALTY U/S. 271(1)(B) SHALL NOT BE IMPOSED FOR ITS DEFAULT OF FAILURE TO COMPLY WITH THE NOTICES AS MENTIONED IN FIRST PARA ABOVE. HOWEVER, THE ASSESSEE HAS NOT GIVEN ANY REPLY / EXPLANATION FOR NON COMPLIANCE OF THESE NOTICES . THE OPPORTUNITY AFFORDED TO T HE ASSESSEE, HAS NOT BE AVAILED OF BY THE ASSESSEE. IT IS PRESUMED THAT THE ASSESEE HAS NO EXPLANATION TO OFFER IN ITS SUPPORT. IN VIEW OF THIS, I AM SATISFIED THAT THE ASSESSEE HAS COMMITTED DEFAULT OF FAILURE TO COMPLY W ITH THE NOTICES U/S. 143(2) AND 142(1), AS MENTIONED ABOVE, WITHOUT REASONABLE CAUSE AND THIS IS A FIT CASE FOR IMPOSITION OF PENALTY U/S. 271(1)(B) OF THE INCOME TAX ACT, 1961. PENALTY OF RS. 10,000/ - IS, THEREFORE, IMPOSED. ITA NO. 3963/ DEL/ 2013 5 3. AGGRIEVED WITH THE AB OVE ORDER OF THE ASSESSING OFFICER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER 26.3.2013 IN PARA NO. 8 HAS UPHELD THE PENALTY OF RS. 10,000/ - AND DISMISS THE APPEAL FILED BY THE ASSESSEE BY HOLDING AS UNDER: - I HAVE CONSIDERED T HE OBSERVATIONS OF THE ASSESSING OFFICER AND SUBMISSIONS OF THE APPELLANT. IT IS SEEN THAT THE ASSESSING OFFICER HAS MENTIONED SEVERAL INSTANCES ON WHICH THERE WAS NO COMPLIANCE BY THE ASSESSEE. IN THE REPLY TO THE PENALTY PROCEEDINGS DATED 25.04.2011 THE ASSESSEE HAS RAISED OTHER ISSUES BUT HAD NOT GIVEN ANY EXPLANATION FOR THE NON COMPLIANCE TO THE NOTICES. IN THE SUBMISSIONS FILED DURING THE APPELLATE PROCEEDINGS IT HAS BEEN CLAIMED THAT NONE OF THE NOTICES WERE EVER SERVED ON THE APPELLANT, BUT IT IS AL SO SEEN THAT THE APPELLANT HAD APPOINTED A CHARTERED ACCOUNTANT TO COMPLY WITH THE NOTICES. IT HAS BEEN CLAIMED THAT SH. SAMEER SHARMA, THE CHARTERED ACCOUNTANT ALWAYS COMPLIED WITH ALL THE NOTICES. THE ASSESSEE HAS HIMSELF SUBMITTED COPY OF A PROCEEDINGS SHEET, WHICH SHOWS NON COMPLIANCE BY THE ASSESSEE ON SEVERAL DATES. THOUGH THE APPELLANT MAY HAVE ATTENDED THEREAFTER, BUT THE FACT IS THAT THERE WAS NON COMPLIANCE ON SEVERAL OCCASIONS WHICH IS SEEN ALSO FROM A PERUSAL OF THE SUBMISSIONS OF THE APPELLANT DATED 23.03.2013. AS THERE IS NO REASONABLE EXPLANATION FOR THE NON COMPLIANCE BY THE ASSESSEE, THE PENALTY U / S 271(L)(B) IMPOSED UPON ITA NO. 3963/ DEL/ 2013 6 THE ASSESSEE VIDE ORDER DATED 29.04.2011 IS HEREBY UPHELD. 4. AGAINST THE ORDER DATED 26.3.2013 PASSED BY THE LD. CIT( A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. . 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AND THE PROVISION OF SECTION 271(1)(B) OF THE I.T. ACT. FOR THE SAKE OF CONVENIENCE SECTION 271( 1)(B) IS REPRODUCED AS UNDER: - 271(1). IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE PRINCIPAL COMMISSIONER OR COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (B) HAS FAILED TO COMPLY WITH A NOTICE UNDER SUB SECTION (2) OF SECTION 115WD OR UNDER SUB - SECTION (2) OF SECTION 115WE OR UNDER SUB - SECTION (1) OF SECTION 142 OR SUB - SECTION (2) OF SECTION 143 OR FAILS TO COMPLY WITH A DIRECTION ISSUED UNDER SUB - SECTI ON (2A) OF SECTION 142. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY - IN THE CASE REFERRED TO IN CLAUSE (B), [IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, [ A SUM OF TEN THOUSAND RUPEES] FOR EACH SUCH FAILURE.] 5.1 AFTER PERUSING THE ASSESSMENT ORDER AND THE IMPUGNED ORDER ALONGWITH THE PROVISIONS OF SECTION 271(1)(B) OF THE I.T. ACT, 1961, WE ARE OF THE VIEW THAT ASSESSEE HAS FILED A LETTER DATED 25.4.2011 REQUESTING THE AO TO DROP THE PENALTY PROCEEDINGS ON THE GRO UND ITA NO. 3963/ DEL/ 2013 7 THAT AGAINST THE ADDITIONS MADE BY THE AO, ASSESSEE HAS FILED THE APPEAL BEFORE THE LD. CIT(A) AND THE SAME IS PENDING. IN VIEW OF THE PROVISIONS OF SECTION 275 OF THE I.T. ACT, IN THE PENALTY PROCEEDINGS, NO ORDER IMPOSING THE PENALTY SHALL BE PASSE D , I N CASE WHERE THE RELEVANT ASSESSMENT OR OTHER ORDER IS A SUBJECT MATTER OF APPEAL TO THE LD. CIT(A) UNDER SECTION 246 OF THE I.T. ACT. THE SECOND REASON GIVEN BY THE ASSESSEE BEFORE THE REVENUE AUTHORITIES IS THAT THE ASSESSEE HAS STOPPED ALL ITS A CTIVITIES IN DELHI AND SHIFTED TO RANCHI, JHARKHAND DUE TO HEAVY LOSSES AND STARTS ITS BUSINESS AT RANCHI AND THE NOTICES WERE NOT RECEIVED BY THE ASSESSEE. THESE ARE THE REASONS FOR NOT ATTENDING THE PROCEEDINGS BEFORE THE AO. WE ARE OF THE VIEW THAT THE AO HAS OBSERVED IN THE PENALTY ORDER DATED 29.4.2011 THAT HE HAS ISSUED NOTICE S MENTIONED IN PARA 2.1 OF THIS ORDER, BUT ASSESSEE HAS NOT MADE ANY COMPLIANCE TO THE ABOVE MENTIONED NOTICES. IN PARA NO. 4 OF THE PENALTY ORDER DATED 29.4.2011, THE AO HA S ALSO MENTIONED THAT SH. SAM I R SHARMA, CA OF THE ASSESEE ATTENED, FILED NECESSARY DETAILS AND FOR FILING THE REMAINING DETAILS, HEARING WAS ADJOURNED TO 10.11.2010, BUT NO EXPLANATION TO PENALTY NOTICE U/S. 271(1)(B) WAS FILED. ON 26.10.2010 AGAIN THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE FOR LEVYING PENALTY IN DISPUTE. IN RESPONSE TO THE SAME, COUNSEL OF THE ASSESSEE FILED LETTER DATED 25.4.2011 REQUEST ED TO DROP THE PENALTY PROCEEDINGS ON THE GROUND THAT ASSESSEE HAS ALREADY FILED THE APPEAL AG AINST THE ADDITIONS MADE BY THE AO BEFORE THE LD. CIT(A) AND THE SAME IS STILL PENDING. IN OUR CONSIDERED OPINION, AO HAS NOT CONSIDERED THE EXPLANATION OF THE ASSESSEE FOR WHICH HE IS LEGALLY ENTITLED AND IMPOSED THE PENALTY IN DISPUTE WAS IN A HURRY MAN NER. SECONDLY, WE ARE ALSO FAILED TO UNDERSTAND WHEN THE AO HIMSELF ADMITTED THAT HE HAS ISSUED VARIOUS NOTICES MENTIONED IN THE PENALTY ORDER AND HE IMPOSED PENALTY OF RS. 10,000/ - WHICH IS NOT SUSTAINABLE IN THE EYES OF LAW, IN VIEW OF THE PROVISIONS OF ITA NO. 3963/ DEL/ 2013 8 SECTION 271(1)(B) WHICH IS REPRODUCED AS ABOVE IN PARA NO. 5 OF THIS ORDER, FOR NON COMPLIANCE OF ONE NOTICE THE PENALTY OF RS. 10,000/ IS LIABLE. WHEREAS ACCORDING TO THE PENALTY ORDER AS WELL AS THE ORDER OF THE LD. CIT(A) THEY HAVE LEVIED THE P ENALTY OF RS. 10,000/ - . WE ARE OF THE VIEW THAT THE AO AS WELL AS LD. CIT(A) ARE NOT CLEAR IN THEIR MINDS WHICH NOTICES HAVE NOT BEEN COMPLIED WITH BY THE ASSESSEE AND ON WHICH NOTICES THEY HAVE RELIED AND AO IMPOSED THE PENALTY IN DISPUTE AND THE LD. CI T(A) HAS CONFIRMED THE SAME. KEEPING IN VIEW OF THE AFORESAID DISCUSSIONS, WE ARE OF THE VIEW THAT THE PENALTY IN DISPUTE IS NOT LEVIABLE AND DESERVES TO BE DELETED , ACCORDINGLY, WE DELETE THE SAME BY ALLOWING THE APPEAL OF THE ASSESSEE. 6. IN THE RES ULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE O PEN C OURT ON 30 / 1 /20 1 5 . SD/ - SD/ - [ S.V. MEHROTRA ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 30 / 1 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 3963/ DEL/ 2013 9